Jay Mutschler : Staples

The office supply industry has changed dramatically in the last decade and for Jay Mutschler the President Staples Australia and Staples New Zealand, change means new markets. He speaks with Ellie McInerney about transitioning a business and creating new market opportunities.  

Jay Mutschler is a journeyman. It is probably why he has such an affinity with Australian history. Having recently read the Chronicles of Captain Cook, this Colorado native was taken by the dramas associated with travelling such vast distances and discovering strange lands. And of the interaction between explorers and a land’s indigenous inhabitants.

While it would be foolish to equate Mutschler’s career with that of Captain Cook, it is clear that he is an explorer and someone who is always looking for new ideas and ways to move forward.

Mutschler’s entrepreneurial flair became evident when he took a role at Eastman in California.

“My business acumen was formed at Eastman, which was a large regional provider of Office Products and Services in California, Mutschler says. “Eastman was a highly entrepreneurial environment that encouraged independent thinking. Ironically, Eastman was owned by David Jones Limited, an Australian conglomerate, so I was destined early in my career to have an Australian connection.”

Mutschler spent 17 years in California in the paper industry. He survived hostile takeover, economic downturns and thrived due to his consumer-centric attitude. He says when it comes to consumers there is very little difference between the Australian and US markets.

“I believe that success in the Australian market much like the US market requires incredible service to your customers in a highly competitive field, you must differentiate yourself by providing unique solutions to your customers. It starts with great people, which we have at Staples. Technology plays a key role in simplifying processes and streamlining what can be a problem area for our customers due to the sheer number of transactions in this space. We measure daily metrics around basic service SLAs and are committed to performing all of the time not some of the time. Doing these things right creates a partnership with customers built on trust.”

With that attitude, he was ready to set sail for Australian shores when the opportunity presented itself in 2012. Though he was leaving behind friends and family, the lure of running his own business unit was too big to ignore.

“I was President of Corporate Express in the US at the time Staples acquired us in 2008. I agreed to remain with Staples in a transitional role, but after three years, I longed for an opportunity to run my own business unit. Staples Australia/New Zealand offered just such an opportunity, so in January 2012 I set out for the southern hemisphere and it’s been a great two and a half years both personally and professionally.”

Acquisitions are never easy and this was no exception, but it did present opportunities for Mutschler to display his leadership skills and entrepreneurial abilities. He cites the transition of this as one of his biggest achievements.

“Today a big part of Staples population is made up of former Corporate Express people. And so one of my proudest moments was to help lead that transition of cultures smoothly and seamlessly. This was a company that was severely damaged operationally and emotionally after a number of years of disruption to the business. And today it is a stable business growing for the first time in many years and our associate engagement is outstanding throughout the company.”

The key to the transition was a cultural one. Mutschler had to focus on changing perceptions and attitudes, particularly when he moved to Australia.

“We had made changes to our organisation structure, installed a new complex operating platform and generally became inwardly focused and absorbed by our own activity.

“We had to first change our cultural attitudes towards becoming more customer focused. I remember challenging each manager in the company to position an empty chair in every meeting and symbolically imagine one of our customers was in that chair. The challenge was would the customer endorse your decision and outcomes of the meeting.

“Implementing the necessary strategies requires clarity of purpose and keeping them to a manageable level. It looks great on paper to see a massive number of strategies and initiatives, but the reality is you need a small focused list to gain people engagement and allow for accountability.”

Once this was achieved, the turnaround in fortune followed and Mutschler was able to focus on brand and market share. This isn’t as easy as it sounds when you already have large players in a market. However Mutschler was quick to bring the organisation’s value proposition to the surface.

“One of the keys to success is our ability to build brand recognition and that’s done through a number of different ways. It’s done through the people that we hire who send our message into the market. It’s done through social media. It’s done through traditional advertising and marketing. It’s done through establishing your brand in the community as a responsible contributor or corporate contributor to that community. So there are a lot of different stepping- stones, all of which need a solid plan behind them that we are in the process of working on.”

The difference between Staples and competitors such as Officeworks is that the latter focus more on the small to mid-size customer where as Staples focus on the larger account and Government space. Staples clients are looking for a different value proposition.

In collaboration with his team, Mutschler has developed a strong strategy around this proposition.

“We are careful in making sure that no one individual in the company establishes strategies. It’s a process that we go through. Obviously, as the president of the company I probably bring to this table the majority of the things that I would like to see become part of our strategic plan. However, we then carefully vet those through our executive leadership team. Often times we change them or re-emphasise them to reflect something that we feel is more important at the time. Once we establish that then we make sure that the strategy is clearly defined and in alignment with the rest of our goals and objectives. There is clarity around what we want to do, when we want to do it and how we are going to do it. So the rest of the employee population can understand the reasons behind it and what role they play in delivering it.

Staples high level goals and objectives are to grow the business profitably and create a loyal customer portfolio following. They are also to anticipate market changes and develop plans to expand in emerging markets for growth categories.

Anticipating change is important for any business, particularly in constantly changing markets. Mutschler has seen a great deal of change.

“The office products industry has changed dramatically over the past decade due to changing consumption of products driven by technology. Staples Australia/New Zealand viewed in the market as an office products company actually derives less than 40% of our revenues today from traditional office products. We have evolved to a company that provides  products and services to the office; cleaning products and kitchen and safety products represent over 25% of our revenues. A decade ago it would have been 5%.”

The decline in traditional services has presented a major challenge.

“The office products sector, whether its office supplies or ink and toner or paper, are all categories that are declining in consumption,” Mutschler says.

“It’s a sector that is really morphing or evolving from office supplies companies to companies that provide products and services for the office. This caused us to look to new categories, new needs that our customers have and to not be stuck in the paradigm that we are an office supplies company and that’s what we should be selling. One of our largest customers buys nappies. Five years ago we probably wouldn’t have thought about providing day care centres with nappies. However the concept of providing nappies is really the same that we use in providing them with paper or pens. So we were able to help them rationalize their supply and streamline our supply chain infrastructure. We sell thousands of nappies today.”

The supply chain is thus large and requires carefully tailored relationships.

“We value our strategic relationships with our supplier partners. I personally align myself with companies like 3M, Acco, Kimberly Clark and Microsoft to name a few. These suppliers provide valuable training, supply chain efficiencies and work hard to improve the seamless transaction of moving their products and services through our customer network.

“The key elements of a successful partner relationship are built on the same principles as our relationships with our commercial customers. It means knowing your customer well, understanding their unique service requirements and bringing innovation to the process. Never surprise your customer and always conduct your business ethically and honestly. This leads to becoming a ‘trusted partner’ as opposed to a supplier.”

Looking forward Mutschler has a 6-12 month tactical plan in place. It was necessary to create short plans to be able to turn the business around and this strategy has paid off. However the vision is quite clear and Mutschler knows what the future looks like.

“We will focus on growing our customer base more effectively in the small mid-market space companies that employ between 20-150 employees. This is a fast growing segment and our market share in this space is low compared to large market and Government. We will continue to expand and invest in our dot.com open site that caters to small and home office market. So our five-year plan is really about expanding into new market segments as well as growing our product categories and service offering to our customers. I suspect if we’ve shaped the right strategic partnerships with our customers they’ll help drive our direction towards new opportunities.”

Mutschler is a man who knows his mind, who understands that he is on a journey. Perhaps not as vast as the one Captain Cook took, but certainly one in which harsh waves can rock a sturdy boat before reaching still waters. He also understands that the journey is ongoing and that failure to change course occasionally will head you in the wrong direction. With that understanding, Staples is in strong hands.

Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

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